Equity benchmarks closed higher for the second consecutive session on Wednesday, primarily driven by strong performance in power and retail stocks, even as broader market sentiment remained cautious ahead of crucial US inflation data.
The 30-share BSE Sensex gained 224.45 points or 0.29 per cent to close at 76,724.08, while the broader NSE Nifty 50 rose 37.15 points or 0.16 per cent to end at 23,213.20. The market displayed selective buying interest, with power sector stocks emerging as the day’s top performers.
State-owned power giant NTPC led the gainers’ pack, surging 4.01 per cent, followed by retail major Trent which advanced 3.86 per cent. Power Grid Corporation showed strong momentum, rising 2.88 per cent, while Kotak Bank and Maruti Suzuki gained 2.14 per cent and 1.91 per cent respectively.
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On the flip side, auto major Mahindra & Mahindra emerged as the top loser, declining 2.90 per cent. Banking and financial services stocks faced selling pressure, with Axis Bank dropping 2.53 per cent, Bajaj Finserv falling 2.26 per cent, and Bajaj Finance declining 2.21 per cent. Shriram Finance also witnessed weakness, sliding 1.77 per cent.
Market breadth remained positive, with 2,150 stocks advancing compared to 1,806 declines on the BSE. The session saw 87 stocks hitting 52-week highs, while 100 touched their 52-week lows. Additionally, 266 stocks hit the upper circuit limit, while 253 stocks hit the lower circuit.
Vinod Nair, Head of Research at Geojit Financial Services, attributed the market’s volatility to “elevated US bond yields, strengthening dollar, and increasing FIIs outflows.” He added that “global markets are cautious ahead of the US December CPI inflation data, which is anticipated to be in the elevated range in the short-term, limiting FED’s ability to cut rates.”
The broader market indices showed resilience, with the Nifty Next 50 gaining 0.88 per cent and the Nifty Midcap Select rising 0.83 per cent. The banking sector remained relatively flat, with Nifty Bank adding just 0.05 per cent, while the financial services sector declined 0.19 per cent.
Technical analysts maintain a cautious stance. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, noted that “the negative chart pattern like lower tops and bottoms is intact” and identified 23,300-23,350 as crucial resistance levels.
Ajit Mishra, SVP Research at Religare Broking Ltd, emphasised that “investors are now closely eyeing earnings from Reliance, Infosys, and Axis Bank for directional cues.” He suggested that while the broader trend remains negative, “a decisive break above 23,300 could lead to a rebound toward 23,500.”
The market’s performance comes amid concerns over rising oil prices and their potential impact on domestic inflation. Traders and investors continue to monitor global cues, particularly the upcoming US inflation data, which could influence Federal Reserve’s monetary policy decisions and, consequently, foreign fund flows into Indian equities.